Correlation Between North Energy and MPC Container
Can any of the company-specific risk be diversified away by investing in both North Energy and MPC Container at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining North Energy and MPC Container into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North Energy ASA and MPC Container Ships, you can compare the effects of market volatilities on North Energy and MPC Container and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in North Energy with a short position of MPC Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Energy and MPC Container.
Diversification Opportunities for North Energy and MPC Container
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between North and MPC is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding North Energy ASA and MPC Container Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPC Container Ships and North Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on North Energy ASA are associated (or correlated) with MPC Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPC Container Ships has no effect on the direction of North Energy i.e., North Energy and MPC Container go up and down completely randomly.
Pair Corralation between North Energy and MPC Container
Assuming the 90 days trading horizon North Energy is expected to generate 2.27 times less return on investment than MPC Container. But when comparing it to its historical volatility, North Energy ASA is 1.48 times less risky than MPC Container. It trades about 0.1 of its potential returns per unit of risk. MPC Container Ships is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,438 in MPC Container Ships on April 24, 2025 and sell it today you would earn a total of 385.00 from holding MPC Container Ships or generate 26.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
North Energy ASA vs. MPC Container Ships
Performance |
Timeline |
North Energy ASA |
MPC Container Ships |
North Energy and MPC Container Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with North Energy and MPC Container
The main advantage of trading using opposite North Energy and MPC Container positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Energy position performs unexpectedly, MPC Container can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in MPC Container will offset losses from the drop in MPC Container's long position.North Energy vs. Electromagnetic Geoservices ASA | North Energy vs. Prosafe SE | North Energy vs. Aker Solutions ASA | North Energy vs. Subsea 7 SA |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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